China Syndrome

Fuelling Capitalism with Communism

There are few more unlikely scenarios than the captains of UK capitalism, Osborne and Johnson, going cap in hand to Communist China to plead that they invest capital in the UK's crumbling infrastructure and industries. The fact that this includes our future nuclear power plants suggests that it is a topsy-turvy world. The nexus of power and influence has shifted inexorably from the west and the future wealth of the UK will be determined not by the British government but on distant shores. And all this on the day that the country, formerly known as the richest and most powerful on earth, the USA, narrowly avoided bringing down its own economy and that of much of the west by its failure to agree on securing more borrowing from China and other sovereign wealth funds to shore up its own dysfunctional economy.

Yet it is a little over twenty years since we were being told that the cold war was over and that capitalism had seen off communism. Looking at the rates of growth and trade balances over recent years suggests the opposite. Laos, China, Vietnam and Cuba are the four remaining communist regimes and all have a growth rate that far exceeds that of the USA and Europe. Could it just be possible that capitalism has been suffocated by its own gambling tendencies and instinctive greed that have grown at an exponential rate in these days of dubious financial practices? Meanwhile, it would seem that state-led long term planning, investment and control of key industries coupled with the discrete encouragement of global companies are delivering more sustainable growth as well as providing a platform for creative starter businesses. It will take more than Jane Fonda to report the outcome of this China Syndrome.